Cargill to Invest in Chicken Processing Facility in Russia

"This poultry plant will support McDonald's decision to secure a local source of poultry supply in one of their fastest growing markets. It is another demonstration of the ongoing collaboration between our two companies, building on our longstanding global partnership."

27 May 2010 --- Cargill has announced its intention to construct a chicken processing facility at its complex in Efremov, Russia. The plant represents an investment of US$30 million at the company's existing industrial complex, located 330 kilometres south of Moscow. It will have the capacity to produce 18,000 tonnes of further processed chicken products per annum for the Russian market. Construction is expected to begin in the autumn of 2010 and it is anticipated that the facility will be operational by the end of 2011.

The facility will focus on supplying high quality chicken products, including Chicken McNuggets, for McDonald's restaurants in Russia. Until recently, Cargill had been supplying the bulk of McDonald's chicken volume requirements in Russia from its facility in Orléans, France and the decision to make this investment is in line with McDonald's strategic choice of pursuing local supply in Russia. Cargill will also use this facility to develop business opportunities with other customers in the retail, wholesale and food service sectors in Russia.

"This investment is a good fit with Cargill's strategic objectives in Russia and enhances our ability to continue providing McDonald's with specific solutions for its business," said Jerry Rose, Cargill's Corporate Vice President. "This poultry plant will support McDonald's decision to secure a local source of poultry supply in one of their fastest growing markets. It is another demonstration of the ongoing collaboration between our two companies, building on our longstanding global partnership."

The chicken meat will be sourced from a number of selected Russian producers, and Cargill intends to develop local supply partnerships, ensuring that the chicken sourced meets McDonald's demanding quality, food safety and welfare requirements.

"Our meats business has been able to take advantage of experience gained during Cargill's many years in Russia," said Richard Maxfield, Managing Director of Cargill Meats Europe. "We are fortunate in being able to make use of synergies within our Efremov complex and also in being able to leverage valuable contacts and existing relationships built up by our businesses."

Cargill's refined oils business supplies oil to McDonald's restaurants in Russia from the Efremov site, and the poultry processing plant will be able to further benefit from on-site supply of oil for its production process.

Once it is operational, the new facility will initially employ around 75 people, with scope for additional employment opportunities, as the business grows.